I still remember 2020. When schools shut, remote learning became the default overnight. EdTech was the hero of the moment. Investors poured money; new platforms launched daily. It felt like nothing could stop the wave.

Fast forward to 2025, and things are different. Some of the shine is off. Many EdTech startups even those that looked promising are struggling. Some are quietly pivoting. Some are shrinking. Some, sadly, are fading away.

So what changed? Why is it harder now? In this report, I’ll trace the shifting landscape, common failure modes, and what founders today must reckon with if they want EdTech to succeed beyond hype.

The 2020 EdTech Boom: Setting Expectations

To understand the decline, we have to remember the high expectations of 2020.

When COVID forced schools to close all over the world, the sudden need for remote learning created an enormous opportunity. Products that let students interact with teachers, host classes remotely, distribute assignments; these were in huge demand. Many EdTech startups rushed in or pivoted drastically.

In that moment, adoption was pushed forward by necessity. Schools had to adopt digital tools even if they weren’t ready. That gave EdTech firms a runway many hadn’t had before.

There were caveats, though. Many systems weren’t built for scale, or for diverse contexts. Many teachers, schools, and students lacked digital readiness or bandwidth. But the urgency of the moment obscured many of those flaws.

Now that the urgency is lower, those flaws are showing.

The Shifting Landscape: What’s Changed Since 2020

Let’s walk through the macro shifts that make EdTech in 2025 tougher.

1. The Fade of Emergency Adoption

In 2020, adoption was in some cases forced. Remote schooling was the only option. In 2025, schools reopen. Many revert to previous methods. The crisis mode is gone.

When adoption is optional again, EdTech must compete not just on features but on demonstrated value, ease, cost, and fit with existing systems. The barrier to switching is higher.

2. Investor Sentiment and Funding Pullback

The capital that poured into EdTech during the pandemic is far harder to come by now. According to PitchBook data, investment into online education groups dropped to $3 billion in 2024, down from $17.3 billion during the peak in 2021.

Valuation multiples in the EdTech sector have also cooled. A report by Finerva shows that the median revenue multiple for EdTech companies is about 1.6× in Q4 2024, dramatically lower than the 7+× multiples in 2020.

These conditions shrink the margin for error. Founders can’t rely on hype or investor goodwill as they might have before.

3. Competition from AI Giants and Free Tools

One of the biggest challenges of 2025 is that major tech players are moving deeper into education. As EdTech Digest notes, OpenAI, Google, Microsoft, and Anthropic are embedding learning tools, “study modes,” and AI agents into platforms students already use.

That means EdTech startups are no longer just competing with smaller edtech firms; they’re competing with well-funded, ubiquitous platforms. If your solution doesn’t offer a compelling differentiation, it gets swallowed or bypassed.

4. The Dual Customer Problem

EdTech has long had a difficult model: your user (student or teacher) is often not the one paying. The paying customer is usually a school, district, or government. Aligning both sides is tricky.

By 2025, that tension is more visible. Students may love your tool. Teachers may find it helpful. But if institutions don’t approve budgets or consider integration costs, adoption stalls. DigitalDefynd, in its “10 Reasons EdTech Fail” list, emphasizes this misalignment between user versus paying institutions as a recurring failure mode.

5. Incremental Value Over Novelty

In 2020, novel features like video classrooms, simple quizzes, or virtual whiteboards were novel enough to win attention. Now, many platforms have those basics covered. The signal has shifted. Startups must show incremental learning gains, real outcomes, cost savings, or differentiated pedagogy, not just a new UI or gimmick.

6. Infrastructure, Bandwidth, Access, and Readiness

Many regions still struggle with connectivity, devices, power, or digital literacy. The assumptions that all students and teachers are ready for tech were overstated in 2020. Too many EdTech startups built products that worked well under ideal conditions and failed in real classrooms where connectivity, device compatibility, or user skill varied.

7. Governance, Policy & Accreditation Hurdles

Education is regulated. Curriculum standards, accreditation rules, data privacy, metrics, teacher training all of these matter. In 2025, schools are more cautious. They demand proof, certifications, compliance. Startups that ignored or underinvested in these areas find it way harder to scale.

8. Fatigue & Change Resistance

Teachers and administrators were overwhelmed in 2020. Many adopted technology out of necessity. Over time, many grew weary of constant change, tech overload, training demands, integrating with legacy systems, and poor support from vendors. That fatigue raises the threshold for convincing adoption.

Case Studies: EdTechs That Struggled or Fell

Examples help bring theory into life. Here are a few well-known EdTech names or initiatives that have suffered major headwinds.

Byju’s: The Rise and Fall

Once the crown jewel of Indian EdTech, Byju’s saw a meteoric rise and then a dramatic fall. At its peak in 2022, Byju’s was valued at $22 billion. But by 2024, its valuation collapsed, operations came under scrutiny, and it entered insolvency proceedings.

What went wrong? Among many issues: over-ambitious expansion, ballooning costs, opaque financial practices, governance and investor disputes, and weakened fundamentals when investor sentiment cooled.

Byju’s delivered a warning: scaling fast without unit economics, discipline, and sustainable margins invites disaster.

2U (EdX parent): Legacy Struggles in a New World

2U, the organization that powers online programs in partnership with universities, faced serious trouble. It filed for Chapter 11 bankruptcy in 2024 amid heavy debt burdens and shifting demand dynamics.

The model of long university partnerships and expensive certifications stands under strain when students question ROI. The overheads and long project cycles can weigh heavily when the environment is more competitive and funding tighter.

EdTech Failure Projects & OLPC

FasterCapital has documented failures across many EdTech projects that failed to scale or even launch well, such as One Laptop per Child (OLPC). Issues ranged from hardware failures, logistical challenges, software maintenance, local adaptation, theft, connectivity, and cultural resistance.

These projects show that good intentions and big funding are not enough. Execution at scale across contexts is brutal.

Common Failure Modes & What They Share

Based on industry reports, startup post-mortems, and challenge lists (like MindK’s “Top 9 EdTech Challenges” and DigitalDefynd’s mistakes), here are recurring pitfalls.

A. Underestimating the Educator–Business Divide

MindK highlights the tension: founders often see education as a market to disrupt. Educators see students and pedagogy. They have different priorities. If your product’s logic doesn’t consider teacher incentives, constraints, or workflow, it’s doomed.

Many EdTech failures stem from this mismatch: a product students like but teachers hate, or a tool easy to use but cumbersome for school IT or procurement.

B. Insufficient Pilots & Real-World Testing

Many startups test in ideal pilot settings. But scaling to real schools with varied infrastructure, constraints, stakeholder resistance, and scale problems exposes gaps.

DigitalDefynd’s “Top 15 Mistakes” includes neglecting sufficient user research and overestimating generalizability of pilot success.

C. Weak Monetization / Business Model Fragility

Free or freemium models that depend on upsell often fail if uptake is low. Or, relying on grants, subsidies, or donor funds is fragile. Many EdTechs underestimated operating costs (hosting, support, training, updates). When funding contraction happens, those with weak models suffer.

D. Scaling Over Support, Underinvesting in Operations

Growth is tempting. But expanding without robust support, training, customer success, and infrastructure leads to churn and reputation damage. EdTech is not a “set and forget” product.

E. Ignoring Local & Contextual Variations

Classrooms differ wildly by region, country, school. Policy, curriculum, language, digital norms, teacher training, and culture matter. A product that works in one context may fail in another if not localized. Many founders overlooked this in the rush to scale globally.

F. Not Accounting for Free or Low-Cost Alternatives (Including AI)

When AI tools become capable of tutoring, summarizing, generating quizzes, or personalized learning, an EdTech that just automates old methods looks weak. The baseline of what’s acceptable tech is rising. AI competition is real.

Chegg, for instance, laid off 22% of its workforce in 2025, citing the impact of AI-powered tools like ChatGPT and Google’s AI Overviews that offered free or low-cost alternatives, cutting into demand.

G. Weak Governance, Overexpansion, or Poor Financial Controls

High growth, spending, acquisitions may look flashy, but they can mask fragility. When investor sentiment cools, those with heavy overhead, debt, or misgovernance struggle to survive. Byju’s is an instructive case.

What Must EdTech Founders Do in 2025 to Survive (and Maybe Thrive)

Facing these challenges doesn’t mean EdTech is dead. Far from it. The demand for better learning is still enormous. But today, success demands sharper strategy, realism, and adaptability.

Here’s what founders should focus on:

1. Start Hyper-niche and Demonstrate Outcomes

Don’t try to conquer “education” broadly. Pick a domain (e.g. early literacy, test prep, vocational training) and prove value in that slice. Show that your tool measurably improves learning outcomes, retention, cost, or satisfaction. That becomes your beachhead.

2. Build Trust and Partnerships with Schools & Educators

Get educators involved early, co-design with them, test in real classrooms, and listen to their constraints. Become a trusted partner rather than an outsider selling tech.

3. Operate Lean, Build Discipline

Optimize for unit economics early. Manage costs tightly. Use data to guide decisions rather than guessing. Don’t expand prematurely.

4. Plan for AI & Open Tools Competition

Don’t ignore AI. Embrace it. Integrate AI cleverly, maybe in a “human + AI” model. Or use it to reduce support cost, personalize features, or augment teachers. Think of your product as competing with AI-native tools, not just other EdTechs.

5. Localize, Adapt, Iterate

When you scale, expect that each region or school will need tweaks for curriculum alignment, language, device constraints, pedagogy norms. Build adaptive product architecture that allows for variation.

6. Focus on Retention, Support, and Onboarding

It’s not enough to sign users; the real test is whether they stick and integrate your tool. Onboarding, training, support, user experience, and continuous feedback matter. Those who come on board but drop off are lost value.

7. Sustainable Growth, Not Growth at All Costs

Track your metrics: CAC, retention, lifetime value, churn, and payback periods. Be honest about them. A model that needs huge injections of capital to survive is fragile.

8. Governance, Transparency, and Prudent Expansion

Maintain clear financial practices, governance structures, and funding plans. If you raise capital, ensure your board and investor expectations align with your mission and pacing. Don’t overstretch.

Looking Ahead: What’s Next for EdTech?

• AI as baseline, not luxury: Any EdTech must integrate AI or machine learning features or risk being leapfrogged.
• Hybrid & blended learning models: As schools reopen, EdTech must find its role in augmenting, not replacing, classroom experiences.
• Micro-credentials and lifelong learning: As the job market shifts, upskilling, reskilling, and adult learning may offer more opportunity than K–12 scramble.
• Data, feedback loops, and adaptivity: The ability to collect meaningful data, adapt content on the fly, and personalize is becoming essential.
• Ethical, inclusive design: Some edtechs have stumbled by ignoring equity, privacy, bias, or complexity in AI. As awareness grows, those missteps will cost trust and adoption.

Final Thoughts (From My Desk)

I don’t think EdTech is dying. I think it’s entering a more demanding phase. The wild growth of 2020, spurred by necessity, gave many platforms breathing room. Now, the breathing room is gone.

Founders who survive will be those who understand the deep constraints of education, not just technologists thinking they can disrupt it. They’ll operate with humility, grit, discipline, and a willingness to adapt.

Some platforms in 2025 will flourish especially those who find strong niche value, partner closely with teachers, integrate smart tech, and stay lean. Others will be remembered as casualties of overambition, misreading of the market, or complacency during growth.

If you’re building in EdTech today or considering it, study these lessons. Map where your risks lie (AI competition, institutional adoption, product retention, cost structure). Test your idea in real classrooms early. Don’t wait for perfection. But don’t leap recklessly either.